Today I want to talk about a more touchy subject: when is it really worth spending your money? Is buying a new computer actually going to help? How about employee training? A firewall? Replacing your boss? Yeah, ok, maybe you can’t actually do that last one but it might have crossed your mind…
Let’s take talk a bit about return on investment and how you can actually grow your business rather than standing still.
The Hard Truth
And more importantly, how do you not feel like this guy?
It’s all about spending your money wisely and insuring you stay within your means. What purchases are going to give you the greatest return for money spent? How do you know? Actually, it isn’t that hard to figure out. The tricky part is in uderstanding three concepts. First, sometimes saving money really does mean you are saving money. Second, money often needs to be spent in order to make more money. Third (and this is the one most often missed or not understood), there are times where you need to spend a little money in order to not lose a lot of money. Let’s look at a few examples:
1: Saving money can indeed be saving money
I mean, that makes sense, right? Look around at your options. Can you buy the exact same thing from website B for a cheaper price than website A? Then buy it from B! Does the smaller brand have the same quality as the big brand? What it really comes down to is this: if you are getting what you need and aren’t sacrificing on quality, then save your money. Watching for deals and saving coupons also goes a long way in this. Every dollar you save is a dollar which can be invested somewhere else!
2: Spend money to make money
You are probably familiar with this one. Nobody knows you exist? Spending money on advertising suddenly makes a lot of people know you exist. Or at least it should… don’t blindly throw money at advertising; a lot of it won’t give you any return. We can help out if you want advice for the best advertising venues to use with your business.
But what about other investments. Does your employee really need that second monitor? Actually, YES. A second monitor boosts employee performance by up to 30%! You are investing in making your employees more profitable to you. Do you need a brand new computer? That depends on what you have. If your current one is ancient and you’re waiting around all day for it, your time lost could very well cost more than a new computer. If it’s doing a decent job and some exciting new thing just came out, you probably won’t really see a return on the purchase.
3: Spend money so you don’t lose more money
This is where it gets tricky. But let’s look at an example: Say you have a business which contains a decent amount of customer data. You’re going along just fine without any problems but for some reason, your IT guy wants you to purchase a new firewall anyways. How is that going to make you any money? Consider it this way: you might spend a few hundred on the firewall and installation. True, no money gained there. But what happens if you didn’t get that firewall and you were breached? The government looks at how hard you tried to protect yourself. If you aren’t protecting yourself at the same level, or better, as everyone else, the fines are designed to severely punish you to the point of going out of business. If you did get the firewall, you may only have to pay damages. Spending a few hundred in this case could save many thousands.
Other examples in this area include battery backups and data backups. That brand new computer is pretty awesome. It probably warrants being protected. If you connect it to a battery backup, you’re out around $75 – $100 but the computer is safe. Don’t use one and you might find out that your motherboard and processor are completely fried at the next power surge. It’s an investment to insure the computer sticks around many years. How about data backups? Again, you might spend $100 – $200 to get running with backups but how much will it cost you if you don’t have a backup and your hard drive fails? Or gets hit with ransomware (if you’ll remember from our Malware Article, about 50% of business were struck with malware last year)? The cost of backing up your data is nothing compared to the cost of losing your data.
At this point you might be wondering what to do when times are harder and there’s less money to go around?
Or if there are more ways to save that hard-earned money?
And those are great questions!
If times are hard, don’t be afraid to tell us. Or anyone you need help from! If people can’t work with you, you don’t need to work with them. Maybe a “band-aid” will take care of your problem and you don’t need a full out new computer. Or a temporary workaround to keep you running with a plan to revisit the root of the problem in the future. We get it, money isn’t always readily there. And we’ll work with you as much as possible to keep you up and running!
And for saving in other areas? How many recurring bills do you have? Do they all need to be there? Take, for example, a program subscription (such as the Adobe suite or Office 365). It might cost more up front, but if you purchase it straight out, you’ll be saving money in the long run. As much as possible, see where you can cut out recurring costs and you’ll find a bit more money at the end of each month.
And remember: Questions are the root of all answers.
And we love answers!